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Why 3D Systems Corporation's Shares Have Jumped 70.1% in 2018

Will the 3D printing rally last in the second half of 2018?

What happened

Shares of 3D Systems Corporation(NYSE:DDD) have jumped a whopping 70.1% so far in 2018, according to data provided by S&P Global Market Intelligence, as financial performance finally started to improve. In the second half of the year, the company will need to prove the performance will continue.

First-quarter revenue was up 6.1% to $165.9 million and non-GAAP loss shrunk by half to $0.03 per share. Investors are looking for even the smallest signs that operations are going to turn around in 2018 and the early results were enough to send share prices higher.

Now what

As impressive as 3D System's stock performance has been in 2018, keep in mind that shares are bouncing off an extreme low and are still down 83% from the start of 2014. Investors are speculating that we're at the beginning of a turnaround, but if that doesn't hold true, the stock could reverse all of its gains very quickly. I will be watching revenue growth and gross margins in the second half of the year to see if there's demand for the company's products and for any pricing power to maintain margins. If either lose momentum, the stock's recovery could be short lived.